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This question relates to the two types of risk and to diversification. a)What is specific risk?What is market risk?What is meant by diversification? d)Explain why

This question relates to the two types of risk and to diversification.

a)What is specific risk?What is market risk?What is meant by diversification?

d)Explain why diversification is a useful tool to manage specific risk but not market risk.Be sure you answer clearly both why diversification can help manages specific risk as well as why it is not useful in managing market risk.

e)Approximately how many stocks in a portfolio do you need to effectively reduce risk?

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